Suppose that a consumers demand for a product

Assignment Help Business Economics

Reference no: EM13744697

Suppose that a consumer’s demand for a product is given by P = 80 – 2Q. A monopolist produces the product at constant marginal cost, where MC = $6. The firm has no fixed costs. Suppose the monopolist sets a two-part tariff for the good where the consumer must pay an amount T for the right to purchase the good, and then the consumer pays a price P for each unit of the good purchased.

a) What value of T and P should the firm choose if it wants to maximize its profit?

b) How much profit will the firm make?

Reference no: EM13744697

Questions Cloud

Which of the two molecules is going to disorganize faster : We have two DNA molecules that consist of 60 pairs of nitrogenous bases.The first consists of 30 cytosines and the second consists of 40 adenines. Which of the two molecules is going to disorganize faster

U-shaped average cost curves-long-run market supply curve : In a perfectly competitive industry in which firms have U-shaped average cost curves, the long-run market supply curve is a horizontal line. This market supply curve is not the horizontal sum of individual firms’ long-run supply curves.

Overbilling the government for a weapons system project : Kidding has uncovered evidence that seems to indicate that Rocket Man has been overbilling the government for a weapons system project. On the one hand he feels he has a duty to bring this wrongdoing to light. After all, he reasons, there is the grea..

How why and when did the first cast collection enter us : How, why and when did the first cast collection enter the United States? Which artists used this first collection?

Suppose that a consumers demand for a product : Suppose that a consumer’s demand for a product is given by P = 80 – 2Q. A monopolist produces the product at constant marginal cost, where MC = $6. The firm has no fixed costs. Suppose the monopolist sets a two-part tariff for the good where the cons..

Demand elastic-unit-elastic or inelastic : In the local In a local market, the monthly price of Internet access service decreases from $20 to $10, and the total quantity of monthly accounts across all Internet access providers increases from 100,000 to 200,000. What is the price elasticity of..

Write a annotated bibliography about music : Who can help me with and annotated bibliography about music.

What price will the manufacturer charge to the retailer : Suppose a manufacturer is a monopoly. This manufacturer produces a good at MC = 4 and sells it to a retailer. The manufacturer has no fixed costs. The retailer is also a monopoly, and it sells the good bought from the manufacturer to consumers.

Indicate the firms short-run supply curve : Draw a (standard) U-shaped SAC curve, U-shaped SAVC curve, and upward sloping SMC curve for a perfectly competitive firm. Indicate the firm’s short-run supply curve. What will be the effect of an increase in fixed costs on the firm’s supply curve and..

User Account

All Pages